I believe that Blizzard spends a disproportionate amount of resources on endgame content. The number of people who will see the Black Temple or Sunwell is a tiny fraction of the playerbase. The amount that this fraction pays in subscription dollars does not cover the cost of content produced for them, or the amount of customer support they use.
I also believe that these resources are being spent well. That it is important to retain the hardcore, to create content for them and keep them in the game. It is my belief that the hardcore have many beneficial effects for an MMO. They provide a spectacle for the other players, are the engine which drives the economy. They serve as aspirational models, and players that everyone knows about.
The hardcore act as hubs in the social network of the game. Without the hardcore, the world would seem emptier, and the network that binds people together, keeps people playing, would fray, and I believe the casuals would fall away.
So if the above is true, let us consider the impact another aspect of WoW: Paid Server Transfers.
The hardcore seek out the hardcore. They want to progress, and the best progression is found with like-minded people. And because they are the hardcore, they are willing to pay the fee to move to a different server. High-end raiding guilds recruit across servers. There are servers where the hardcore have congregated, which boast multiple Illidan-killing guilds. Servers like Mal'Ganis or Korgath.
This Elitist Jerks thread is an example of the situation. The majority of high-end guilds are on PvP servers. The hardcore on PvE servers would like to be able to transfer to such servers. And the phenomenon magnifies itself. If some of the hardcore leave the server, it becomes harder for the remaining hardcore to succeed, making it more likely that they too will transfer.
But what happens to the old server when they do transfer?
If the hardcore are nodes in the social network of the server, removing the nodes damages the network, and will eventually causes casuals to leave. And remember that the hardcore will consolidate themselves on a few servers. For every server the hardcore flock to, there are five or more servers being abandoned by them. Casuals will not pay to transfer servers. If the social network of their server is too badly damaged, they will simply leave the game.
On the other hand, if the hardcore are not hubs in the network, if the server will happily survive without them, then you really have to wonder if spending all those extra resources on the hardcore is worthwhile. Wouldn't it be more profitable to cater to the customers who don't require as many resources to satisfy?
Paid Server Transfers allow the hardcore to consolidate themselves on a few servers, damaging the many servers they leave behind. Blizzard needs some mechanism to push the hardcore in the opposite direction, to cause them to spread out. In the past, overcrowding and server stability was one of the main forces opposing the drive to congregate. Unstable servers caused Death & Taxes to move to Korgath, revitalizing that server. But as Blizzard's technology improves, it is less likely that unstable servers will push the hardcore to spread out.